The two Dakota stops on Interstate 29 have so many similarities that more Sioux Falls businesses have headed north and Fargo’s influence is felt here, too.

From retail to real estate, banking to broadband services and medical care to marketing, the two communities both are home to several Sioux Falls names, including Zandbroz Variety, Midcontinent Communications, Home Federal Bank, Syverson Tile, Lawrence & Schiller and Sanford Health. On the flip side, Fargo often leads Sioux Falls when it comes to getting trendy chain restaurants first or even airline services. The North Dakota city got Noodles & Company and Frontier Airlines before Sioux Falls did, for example.

A case can be made that Sioux Falls has shifted its alignment with neighboring cities. While it drew comparisons with Sioux City during its meatpacking heydays, the city now looks more like Fargo, with a similar robust economy, a health care emphasis and downtowns that are full of locally owned restaurants and shops.

Before Sioux Falls-based Home Federal opened a loan production office in Fargo last fall, the local banking company did its research, looking at building permits, bank competition, economic activity, employment and more, said Steve Bianchi, president and CEO of parent company HF Financial Corp.

“It felt like we were looking at a twin city,” he said. “When we went through the analysis of the market, there were some very striking similarities.”

Even though Fargo is nearly a 3 1/2-hour drive, or roughly 235 miles north, it’s so similar to Sioux Falls that many local executives say they feel like they’re at home in either city.

Paul Richard, president of Sanford Fargo Medical Center, spent four years after the merger of Sanford and Fargo’s MeritCare splitting his time with half of his week in Sioux Falls and the rest at home in Fargo. He said the locally owned restaurants in downtown Sioux Falls remind him of the local eateries in Fargo’s downtown. He shopped at Norman’s Men’s Wear and Halberstadt’s Men’s Clothiers here and Straus Clothing and Halberstadt’s in Fargo.

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“The similarities in the core of the cities is so striking, yet there’s variety,” he said.

Richard doesn’t need to come to Sioux Falls as often anymore, yet he and his counterpart here, Paul Hanson, president of Sanford USD Medical Center, still meet weekly thanks to technology.

“Paul and I talk every week. We do it oftentimes by video link,” Richard said.

When they look at the like-mindedness of the communities and the regional health care system they head, Sioux Falls and Fargo are stronger when they work together, they agree.

In their own business, for example, they’ve had to transfer babies from one hospital to the other if one neonatal unit was full and the other had openings. Specialists have been able to work at either hospital, wherever there is a need, Hanson said. Sanford is building a $494 million hospital to serve 4,200 patients a day in Fargo, which is the seventh largest hospital project under construction in the country.

The two communities working together also is a way to build for the future.

To that end, Richard compares Interstate 29 to a regional spine that builds up the entire area in terms of jobs and a place where young people will want to live and work.

“There’s a very natural pathway of communities along I-29 between Fargo and Sioux Falls,” Richard said. “It’s basically … the backbone or spine of a business region. The state borders don’t matter a whole lot.”

Tom Simmons, senior vice president of public policy for Midcontinent Communications in Sioux Falls, said the company is building a new broadband system to provide service in Fargo because there is good support from customers there that like services already provided in the Fargo-Moohead area.

“The time is very opportune because Fargo has a very aggressive plan for the future,” he said. “I think there’s a like spirit in the Fargo-Moorhead metro area as there has been in Sioux Falls.”

The project is expected to take three years, but Midcontinent will add customers as the project is built out.

“It’s the right decision at the right time, we think,” he said.

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Simmons, who has been active in Sioux Falls development efforts for years, said it will be hard for any community to top Sioux Falls’ successes of late and the national notoriety that has come with that. However, he said, “I’d sure like to see Fargo try.”

“There are certainly differences. From our standpoint, there are enough things similar for us to be comfortable,” Simmons said.

Some differences emerge

A comparison between the two cities that are the economic engines of their states shows many similarities but also some standout differences, businesspeople say.

Fargo-Moorhead, with a combined population similar to Sioux Falls, has 25,000 college students between North Dakota State University, Minnesota State University-Moorhead and Concordia College. That would be like plopping South Dakota State University and the University of South Dakota in Sioux Falls to join Augustana College and the University of Sioux Falls.

Fargo’s higher education presence brings in money, a youthful vibrancy and a higher education level overall. Census data from 2012 shows that the percentage of people who have a bachelor’s degree or higher is 39 percent in Fargo and 32 percent in Sioux Falls.

Those demographics can make a difference in attracting national chains. Ted Horan, who lives in Fargo, has two Noodles & Company restaurants in the Fargo-Moorhead market and brought the first one to Sioux Falls, with plans for a second.

“Fargo is a great market because of the students. It’s a true college town. When you consider the number of students that enter the community every year, our business explodes in August. It dies pretty dramatically in June, so you have that combined with all the events that are in this community,” he said. “And Sioux Falls is a regional hub, certainly, look at the Summit (League basketball) tournament, everybody felt an uptick in business. ... So I think they’re very similar markets, no question, but I do think the college students play a large role in why many national chains will choose this market first.”

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The demographic also has meant that more young people live in downtown Fargo, which fuels business. That’s in part because NDSU has located its art and business colleges in renovated downtown buildings. The community also has free bus service for students every 15 minutes between the main campus and the downtown classes. Fargo also has a downtown bike lane.

Student influence is just one difference, however.

Fargo, surrounded by the rich soil of the Red River Valley, is even more connected to agriculture and the revenue from that industry than Sioux Falls is.

“They have more variety of crops. The money from ag is pretty substantial,” said real estate broker Dennis Breske of NAI Sioux Falls, who also has had an NAI office in Fargo for years. “The reason I went up there is because there are so many similarities between Fargo and Sioux Falls.”

Both cities are in the southeast corner of their state, both are at the intersection of two interstates, both are the largest cities in each state and both are growing at a healthy pace, he said.

Breske sees plenty of other Sioux Falls businesses there as well. Austad’s Golf, Regency Hotel Management, Furniture Mart USA and others have locations in the city.

One difference is that Fargo has a closer connection to the Minneapolis market, Breske said, adding that it might be because of nearby lake homes where Fargo businesspeople mingle with those from the Twin Cities.

Fargo also has more commercial corridors and the city’s West Acres Mall is near I-29 but not landlocked by it, giving new businesses more places to open if they want to be near the mall, he said.

“It feels to me that they have a lot more commercially zoned land,” Breske said. “It’s a very, very healthy economy. It’s a state like us. They have the same conservative values we have.”

Comparing performance

In 2013 in Sioux Falls, for example, a record 482,645 people departed from the airport compared with a record 398,677 last year in Fargo.

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“We’re catching up again. Our service patterns are real similar,” said Shawn Dobberstein, executive director of the Fargo Airport Authority and a South Dakota native. The airport’s business is up 13 percent this year, and he sees South Dakota license plates in his parking lot.

In terms of Fargo’s advantages, the city has the Fargo Dome, which brings in nationally named concerts and a lot of sporting events. And Fargo has the NDSU Bison, a point every enthusiast makes. It’s also the headquarters for Scheels, which is adding a major expansion at its Sioux Falls sporting goods store.

JL Beers is headquartered in Fargo, too, and its first expansion outside of North Dakota was to Sioux Falls.

Brothers Jeff and Greg Danz opened Zandbroz Variety in downtown Sioux Falls in 1989 and their choice for an expansion in 1993 was downtown Fargo.

“Fargo seemed like a good fit because it had a lot in common with Sioux Falls: strong, growing local economies and downtowns that were going through a renaissance. The one difference – three large colleges in Fargo-Moorhead – was a big plus as far as we were concerned,” said Jeff Danz who has the Sioux Falls store. His brother’s family runs the Fargo store.

The stores still carry some of the same merchandise but have distinct personalities and also have diverged in what they feature, Danz said. It’s like a metaphor on the twin cities themselves.

Despite the Fargo store having a larger display space and some different merchandise, it also has hardwood floors like the store in Sioux Falls.

“If you walked into this store, you would know it was Zandbroz,” said Josie Danz, who manages the Fargo store.

Bill McLean, senior vice president for human resources for Avera Health, grew up outside of Fargo and has lived and worked his entire life in communities along I-29. He sees the Fargo-Moorhead area as having more of a white-collar feel than Sioux Falls does because of large insurance companies and Microsoft Corp.’s Fargo campus.

Yet it’s easy to throw compliments both directions.

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“My friends in Fargo say, ‘Wow Sioux Falls is huge,’ that it is really, really growing. Then people from Sioux Falls will say, ‘Wow I can’t believe how big Fargo has gotten,’ ” McLean said. “The people in both cities are very progressive.”

Sioux Falls might have a slight edge in economic development, he said, but he is sure Fargo will work to be more competitive, too.

“I think Sioux Falls has got a better business climate in the sense their tax structure is more enticing for people to come here.”

He gives Sioux Falls the edge in health care, too. “While it is a large health care industry in Fargo, it’s much larger down here. Sioux Falls is absolutely extraordinary when it comes to health care,” McLean said.